Home Prices Continued Moderate Pace of Correction in December

Home Prices Continued Moderate Pace of Correction in December

FHFA and S&P Case Shiller each released their monthly home price indices (HPIs) for December this morning.  These are the two most widely followed HPIs.  FHFA has a broader reach while Case Shiller is focused on the 20 largest metro areas.   Both HPIs continued to do exactly what they were doing last month.  FHFA declined by 0.1% and Case Shiller dropped at a 0.5% pace.   The reversal from the strong pace of gains early in 2022 has been abrupt, but price declines have been modest.  If FHFA continues moving mostly sideways (which it arguably has over the last 4 months), it would mean that home prices have merely leveled off without undergoing a large outright correction.  In other words, prices aren't necessarily destined to lose much--if any--ground in year-over-year ter